Positive outlook for Kazakstan’s mining sector

Business Monitor, a country risk and industry research company, predicts that the value of Kazakhstan's mining industry will reach US$ 29.5 billion by 2017, down from the previous forecast in light of the view of an overall decline in commodity prices.

Coal will lead growth

Growth will be led almost entirely by the coal, gold and copper sectors, which together account for the majority of the value of Kazakhstan's mining industry. Copper production is also a bright spot in the country, given aggressive expansion plans by Kazakhmys and Rio Tinto's commitment to invest US$ 100 million in exploring northern Kazakhstan for copper.

State still a dominant force in the mining sector…

Mineral resources are owned by the state in Kazakhstan and controlled by the Ministry of Energy and Mineral Resources. This has been generally supportive of the mining industry, creating a positive investment climate – although it has also shown that it will intervene when necessary, notes Business Monitor.

… but foreign investment will grow

The mining sector is currently dominated by the state-owned mining companies, Kazakhmys and Eurasian National Resources Corp. (ENRC), as well as zinc producer, Kazzinc, and gold miner, KazakhGold. However, Business Monitor expects foreign companies to become more involved in the country, encouraged by the vast potential of the country’s mining sector.